3 Jan 2011 mcr   » (Journeyer)

How can Research in Motion survive?

There are lots and lots of opinions in the media about whether or not RIM and it's flagship product, the Blackberry can survive. For instance, a quick google gives me: http://gigaom.com/apple/poking-holes-in-rims-anti-apple-rhetoric/



A friend and I discussed this over lunch the other day. We care only because as far as the Government of Canada's IT policy is concerned, they see RIM as a golden goose who can do nothing wrong. RIM is an endorsement for the government of canada's "IT policy" --- it's a sign of success: those of in the industry see it as more of a four-leaf clover. Something that was happened in Canada by chance, not by design.

Assuming that we wanted RIM to survive, what would we do as CEO?

We have a lot of challenges, and we think that many of them are internal, not external. The major one is the huge amounts of Not-Invented-Here (NIH). The second major issue is the degree to which RIM is the centre of the Blackberry world, with data from most models of phones going through expensive data centres for reprocessing. When the Blackberry first appeared, it did not have Internet connectivity, but rather worked through various proxy servers and HTML-reformatters. We were surprised that more people didn't ask questions when CIBC sued some former employes, and subpeoned emails from their BlackBerry.. Why was the subpeaona served to RIM? http://www.robhyndman.com/2005/01/06/cibc-sues-six-former-employees/ http://www.heydary.com/publications/blackberry-pin-monitoring.html

Today, it does better, but few developers really want to write apps for the Blackberry JavaMobileEdition. Android is seriously taking a lot of market.

What advantages does RIM have? Sure some patents about some user interface things (mostly physical stuff).

What it does have is a brand name, and Blackberry devices are considered serious status symbols. For instance,a salesperson I was meeting with explained to me that, "of course", his company offered to get him the latest BlackBerry, but he found the keyboard too small for his aging eyesight, and preferred to keep his 2 year old unit.

Along with this brand name is a pretty good email system with pretty good integration into Microsoft Exchange. This is something that Google and Apple does not have as well done. (Yes, Google has most of it, but they don't have the same level of trust from the right places, and many Microsoft IT fanboys hate Google, just on principle)

The problem that I see is that Blackberry has started to go after the consumer market, and with this, they are diluting the BlackBerry brand name. Used to be only big companies could get email integration, and only the important people had BlackBerrys. Now every second person on the bus has one... and they aren't even the cool people. The cool people have their own iPhone or Android. If a cool person has a BlackBerry, it is because their company made them take one because it integrated, but said person has their own phone for their real use.

So, my advice to RIM is as follows:

1) break up the company. Spin off BlackBerry hardware as private company. Have them make handsets under the BlackBerry name. Sell them for premium dollars. For about 18 months (one hardware design cycle), they can make BlackBerry OS units, but by mid-2012 they have to shipping Android as the base OS.

2) port all of BlackBerry's custom software to Android in native mode. (i.e. not Java). I do not think much of the core software on the Blackberry is written in Java Mobile (I could be wrong, it could all be JavaME now, but it wasn't a few years ago). Porting to native is probably easier, and may even make it easier for them offer some unique features.

Native mode code often requires a rooted phone to work well. In this case, it is a feature, not a bug: the target audience is not end users in some sense, but rather, carriers. If you can get BlackBerry Email on just ANY smartphone, then the carrier does not get a chance to charge more for this.

Many carriers have a BlackBerry plan which is different than just Internet, because they know that BlackBerry's can't run torrent clients.

3) create the RIM cloud, and go into competition with GMAIL, Rackspace's Mailtrust, etc. Offer strong integration into corporate email, and offer various DRM-ish controls on what can be done with email that is accessed via the native apps. (it's all pretend security of course, but many people seem to insist on drinking coolaid...)

What is the result?

  1. RIM is no longer competing on price at the low end. Rather they are using the existing low-end smartphone makes to drive corporate/carrier business to them.
    1. RIM's hardware spin-off is still making high-end, high-margin handsets for executives. This helps to return much of their status symbol. The new handsets should be easily distinguished from the old low-cost ones they used to make. (New colour? Breath-mint dispenser? ...)

      Since they are offering the same integrated apps on other vendor's phones, it means that the peons who need to be "integrated" no longer need BlackBerry handsets, and so nobody will confuse them with important people.

      1. RIM's communication cloud can expand into areas they have no yet been into. This is where the money is in the future. How about if executives can now approve expense reports/authorize-purposes from their units via digital signatures?

Will RIM do this? Unlikely. RIM will be Canada's Polaroid.

Syndicated 2011-01-03 17:36:00 (Updated 2011-02-08 16:09:49) from Michael's musings

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